Understanding the county budget making process
The budget making process at the county level is a subset of a grander Public Finance Management (PFM) process.
PFM in Kenya is anchored in Chapter 12 of the Constitution of Kenya and the Public Finance Management Act 2012 (PFMA).
The PFMA was developed with the recognition that a good system is key for the success or failure of a decentralised system of government.
The PFM process encompasses four broad areas: collection of revenues; allocation of funds through the budgetary process; utilisation of public revenues, for instance through procurement of goods and services; and internal and external auditing of public spending and performance of State institutions.
As such, the budget process is part of the collective effort towards ensuring public finances are prudently managed at both levels of government.
To facilitate long term planning, budgeting is further formulated under the Medium-Term Expenditure Framework (MTEF).
The MTEF is a three-year Budget projection which is revised annually to incorporate policy changes. In essence it is a rolling three-year framework.
Why three years? The reason is that majority of decisions related to budget revenues and expenditures have fiscal implications beyond one year and three years allows for a medium-term perspective.
The budget can be segmented into six interrelated processes. These are generally the processes of preparing, approving, implementing and accounting for the resources in the budget.
These six phased processes are policy review and formulation Strategic and operational planning; budget formulation, approval and adoption; budget execution; accounting and reporting audit and evaluation
The PFMA moves cyclically around these six processes at the national and county government. Each of the above-mentioned stages are further broken down at both levels of government.
The diagram below illustrates the budget process broken down in a county context. — The Writer is a senior manager – Public Finance Management, Expertise Global Consulting Ltd
